The European Bank for Reconstruction and Development (EBRD) has drawn up plans to lend Russia’s United Bakers company US$30m to finance working capital, restructure debt, buy modern biscuit manufacturing equipment, and acquire rival businesses, notably an (unnamed) cereal factory.

A bank memorandum said the aim was to enable United Bakers to move from concentrating on bulk manufacturing to the packaged market, competing with western biscuit manufacturers (and their subsidiaries), especially in serving lower income groups within Russia, who often cannot afford the process charged by these established manufacturers.

Privately-owned United Bakers is one of the largest Russian producers of crackers, biscuits and breakfast cereals; it was created under Stalin in 1928, being privatised in 1992. It currently has five production units: four in central Russia and one in Siberia.

The bank will release the money in two phases and it will be complemented by $5m investment sourced elsewhere by United Bakers.